CIRCULAR

CIR/IMD/FIIC/05/2015

June 12, 2015

To,
1. All registered Foreign Portfolio Investors ("FPIs") through their Designated
Depository Participants
2. All Registered Foreign Venture Capital Investors
3. All Approved Designated Depository Participants ("DDPs")
4. All Registered Custodians of Securities
5. All Depositories
6. All Recognized Stock Exchanges
Dear Sir/ Madam,
Sub: Clarification on grant of registration as a Foreign Portfolio Investor (FPI)
to Registered Foreign Venture Capital Investors (FVCI).
1. SEBI has received a query from a Designated Depository participant (DDP)
seeking clarification with regard to any restrictions/conditions on applicants,
holding registration as a FVCI, from obtaining registration as a FPI.
2. The SEBI (Foreign Portfolio Investors) Regulations, 2014 ("FPI Regulations") as
well as the SEBI (Foreign Venture Capital Investors) Regulations, 2000 ("FVCI
Regulations") do not expressly prohibit FVCI from holding registration as a FPI.
3. The investment conditions and restrictions for an entity registered as FVCI under
FVCI Regulations are different as compared to the investment conditions and
restrictions as prescribed for an entity registered as FPI under the FPI
Regulations. Thus, such an entity would be required to have a clear segregation
of funds/ securities which are proposed to be invested / held under the respective
registrations.
4. Accordingly, it is clarified that a DDP may consider an applicant, holding FVCI
registration, for grant of registration as an FPI subject to the following:
a. The applicant complies with the eligibility criteria as prescribed under the FPI
Regulations.
b. The funds raised, allocated and invested must be clearly segregated for both
the registrations.
c. Separate accounts must be maintained with the custodian for execution of
trades. However, such an applicant shall have same custodian for its activities
as FPI and FVCI.
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d. The securities held under FVCI and FPI registrations should be clearly
segregated.
e. Reporting of transactions must be done separately according to the conditions
applicable under the specific registration.
f. All the conditions applicable to the entity under the respective registrations
must be complied with at the level of the segregated funds and activities with
respect to the specific registrations.
g. The investment restrictions as applicable to FPI, in terms of Regulation 21 of
FPI Regulations and SEBI Circular No. CIR/IMD/FIIC/20/2014 dated
November 24, 2014 shall be applicable.
h. The applicant does not have opaque structure(s), as defined under
Explanation 1 of Regulation 32(1) (f) of FPI Regulations.
5. The applicant shall be required to comply with the provisions of FPI Regulations,
FVCI Regulations and the circulars etc., issued there under from time to time.
6. This circular is issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992 to protect the interests of
investors in securities and to promote the development of, and to regulate the
securities market.
7. The circular is available on SEBI website at www.sebi.gov.in under the categories
"Legal framework" and "information for - FPI".

Yours faithfully,

ACHAL SINGH
Deputy General Manager
Tel No.: +91-22-26449619
Email: achals@sebi.gov.in

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